It has become clear over the last 6 months that brands are losing faith with digital agencies, complaining that costs are high and delivery is ‘clogged up’ with bureaucracy. The result is the usual January London agency merry-go-round with many others taking the (invariably short term) savings of moving services in-house.
The reasons for this dissatisfaction is multi-faceted but the underlying driver is that the economy has stalled, confidence is diminishing and competition is stifling.
Traditional Model
Traditional digital agencies typically operate on a model where you pay a percentage of your ad spend, or a fixed monthly retainer, for the management your Pay-Per-Click (PPC) campaigns. This covers services like campaign setup, optimisation, reporting, and ongoing management.
Essentially, you're paying for the agency's time and expertise. This contrasts with the second major model Pay-Per-Lead (PPL) where you only pay for actual leads generated, regardless of the agency's effort or ad spend.
Push started life as a PPC agency but the PPL side of our business has been steadily growing for the last 5 years and is now a Business Unit in its own right. PPL does not suit everyone but for clients who are willing and able to ‘outsource’ their marketing the results are staggering.
Good PPL campaigns comfortably deliver more leads at half the cost of a PPC Agency model.
Pay for Leads, Nothing Else
In the PPL model the client allows the team to take over everything giving them the speed and agility, much like a stocks trader, to react to fleeting opportunities and modify ads on the fly to maximise results.
The drawback for the client is a lack of control as they must trust the team to act at this speed. After a couple of months the results become a predictable mathematical model allowing the PPL team to guarantee results whilst continuing to innovate.
PPL provides a panacea for many as it guarantees leads of a statistically predictable quality for an agreed price but it moves too fast for any client ‘control’. Some Brands simply cannot give over that much control as their brand is too precious to outsource, the usual solution unfortunately is the dreaded bureaucracy.
There is however an option that allows clients to hand over some control delivering the PPL-esque speed and results whilst retaining a more bespoke level of oversight.. This is what Push calls "The Third Way", a hybrid model designed for shared risk and mutual benefit.
Introducing The Third Way
The Third Way acknowledges that both PPC and PPL have their merits and drawbacks. Instead of forcing clients into one rigid structure, it offers a flexible partnership where costs and rewards are shared. This model typically involves lower upfront fees compared to traditional PPC and more control than PPL.
In exchange for reduced up front fees AND greater control, the client agrees to a profit-sharing arrangement.
Every Client is Unique.
One of Push’s first hybrid clients was an Equity Release provider who presented a familiar challenge. The client worked on tight margins and as results had stalled, understandably they were reluctant to pay for experimentation.
The compromise was to switch the commission model from confirmed leads to booked appointments for the same fee. This immediately improved the clients cashflow and increased their confidence. In return they offered a 12.5% commission on every sale meaning both sides instantly had their goals aligned. With clearly aligned goals the results naturally follow.
A second major client, a gold dealer, scaled from one local shop into a multi-million pound online business with this hybrid model. The client had aggressive growth targets from the outset but initially could not afford the multi-channel campaign. The client paid a basic agency retainer for core channels Google, Meta and Bing which they controlled normally.
In addition we agreed on a profit share model that paid for the Push team to test and build ads on secondary channels including TikTok and Snapchat. This remains our most successful hybrid model after several years of ongoing innovation with the key to success being trust, collaboration and mutual incentives
A third example comes from one of our online retailers who once again had ambitious growth targets aiming for 400% ROAS, as is often the case they were not confident to try channels outside of Google and Amazon. We agreed a profit share outside of the ‘basic’ management and used this freedom to trial Pinterest, Bing, YouTube, Organic SEO and Meta.
The results were magnificent and we doubled the size of the company in under 18 months and helped them hit that magic £1m a month revenue mark.
How it Works
The Hybrid Model is based on simple maths and shared risk with reduced fees upfront and profit-sharing on the results. In summary it offers the following advantages:
- Client Controls the Critical Elements
Client can maintain normal PPC arrangement for elements that are critical to their wider business and brand. - Focus on Outcomes
The emphasis shifts from clicks and leads to the business results that matter to the client.| - Reduced Risk
Lower upfront costs minimise the financial burden on the client especially around new channel experimentation. - Shared Success
The profit-sharing model aligns the interests of Push and the client, typically profit sharing kicks in at a minimum threshold - Reduced Bureaucracy
The client sets the boundaries and the Lead Gen team works autonomously to deliver results.
Why Now? AI makes in possible
Flexible commercial models are not new but they have always been the exception, the obvious reason for this is that its bloody hard work to provide a different solution for each client. It offers ZERO Economy of Scale, the bedrock of any traditional operation.
What has changed is AI. Push has invested heavily in AI that delivers significant operational efficiencies. It is these efficiencies that allow Push to maintain so many diverse commercial models and operations.
The Third Way, driven by AI, is ideal for businesses seeking a collaborative, performance-driven approach to digital marketing, where risk and reward are shared for mutual benefit.
Contact us to discuss if the third way could work for you
